Clipper Logistics sees 100% increases from online retail

Leeds-based retail logistics firm Clipper Logistics on Tuesday published an update on its response to the Covid-19 pandemic and on trading for the full year ended April 30, 2020.

Clipper said it is witnessing volume increases of over 100% on a like-for-like basis with some customers amid the surge in online retail sales.  

The company has also been working on new NHS initiatives including a separate channel to deliver PPE to hospitals and an online portal for PPE orders to GP surgeries, small care homes and home care providers.  

“The group has continued to trade well throughout the year and financial performance was broadly in line with expectations, delivering an EBITA of circa £24.0m for the year to 30 April 2020, an increase of nearly 19% on the prior year,” said Clipper.

“From the onset of lockdown on 23 March, there was a period of disruption within the group’s operations for bricks-and-mortar retailers, which was impacted as customers closed their stores.

“Retail activity saw a period of hiatus, as consumer confidence was adversely impacted. 

“Clipper embraced the opportunity to reach out to both new and existing customers to offer assistance, and since that initial period of disruption there has been an accelerating level of trading activity …

“Following the initial period of disruption, Clipper has experienced strong levels of activity from both new and existing clients.

“In particular,  the company has provided support to online retailers with high e-fulfilment volumes, as some online retailers experienced extremely high levels of demand, regularly outstripping that seen over the Black Friday period last year.

“We are witnessing volume increases of over 100% on a like-for-like basis with some customers.  

“April 2020 saw Clipper roll-out additional services for several grocery-related customers, including Tesco, Asda and Morrisons as they mobilised their operations to address the challenges of COVID-19.  

“Importantly, April also saw us begin our supply chain support to NHS frontline staff, including the warehousing and distribution of PPE to hospitals. 

“The company has been working alongside the NHS on two new initiatives.

“The first, a separate channel to deliver PPE to hospitals; the second has seen Clipper develop an online portal for fulfilling orders for PPE to GP surgeries, small care homes and home care providers.  

“In total, the new activities brought on since lockdown, coupled with new contracts coming on stream in Q1 FY21, will add a further 1.5 million square feet of space to Clipper’s pre-existing 10 million sq. ft. infrastructure.  

“The group has also seen a significant increase in its tender pipeline; the annualised revenue of the probability-weighted pipeline stood at over £50 million as at 18 May 2020, a significant increase on the same period last year …

“Meanwhile, Clipper’s European business continues to grow rapidly, driven by a growing presence in e-fulfilment and returns management. Revenue in Europe grew by 41.3% in FY19 and by a further 33.7% in FY20. 

“The company-compiled consensus for EBITA for FY21 is £25.8m.

“Whilst COVID-19 still presents some risk, the board believes that EBITA will be comfortably ahead of these expectations.”

Clipper Logistics executive chairman Steve Parkin said: “Throughout the COVID-19 pandemic, Clipper has continued to demonstrate its agility and ability to focus on customer service and providing innovative solutions in a rapidly evolving environment, highlighting the importance not only of robust supply chains but collaboration as well.

“At Clipper, we’re now moving faster than ever, accelerating development and evolving to meet the expectations of both our retailers and their consumers, as the shift to online continues to accelerate.

“Nearly 70% of our revenue in both our UK and European logistics operations is derived from online retail. 

“We are looking to the future with  confidence.”